Global CIO: Oracle And SAP Race For Mid-Market Opportunities - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Government // Enterprise Architecture
06:01 PM
Bob Evans
Bob Evans

Global CIO: Oracle And SAP Race For Mid-Market Opportunities

As SAP and Oracle rush to court mid-market customers, are they missing the real contest: the traditional on-premises model versus hard-charging SaaS? Meanwhile, don't count out Microsoft.

SAP calls its program Fast Track, and Oracle calls its program Accelerate. By any name, the intent is clear: with big-customer purchases of enterprise apps waning, both SAP and Oracle are racing to connect with mid-size companies via specialized services and product bundles.

Meanwhile, still in the show position but hoping to challenge for the lead, Microsoft yesterday acquired four small ERP companies that it believes will make it more competitive in the mid-market space, whose dimensions vary from companies with several hundred to several thousands employees, depending on whose definition you're using.

But the race's ultimate outcome might ultimately have less to do with who arrives first carrying an old model on its back, than with who will be first to deliver a powerful and flexible combination of traditional (on-premises) and untraditional (SaaS and on-demand) offerings for these medium-sized companies.

Global CIO
Global CIOs: A Site Just For You
Visit InformationWeek's Global CIO -- our new online community and information resource for CIOs operating in the global economy.

I don't know if either SAP or Oracle would agree—or at least if they'd agree in public—but the real long-term threat to both companies is not each other; it's SaaS and the agility and predictability and simplicity it is proving to be able to deliver to enterprises large and small. And if those two large and sophisticated and successful and powerful enterprise companies think that the need for speed is keen among medium-sized companies now, just wait til those mid-market CIOs start seeing more and more SaaS companies come in and promise to light up new applications for CIO customers in a matter of weeks instead of a matter of months.

And wait til Oracle and SAP start to see the looks on the faces of the CIOs of these mid-size companies when they realize that more and more kinds of SaaS applications are becoming available, all without the traditional model's up-front capital expense, without its complex installation and implementation and cutover contortions, and without giving CIOs the lingering sense that they are marching into 21st-century battles with 20th-century weapons.

On the flip slide, as I mentioned a moment ago, Oracle and SAP, for all the criticisms they take about being inflexible and too expensive and hard to deal with and yadda-yadda-yadda, have massive networks of customers, partners, support networks, add-on ecosystem-ites, and hard-earned expertise. They have unparalleled insights and experiences in not just anticipating what their customers might want, but in truly knowing—up close and very personally—what those customers want, need, and expect. Whether they always deliver is another question, but that's hardly a limitation exclusive to them.

And from the looks of their new marketing programs aimed at mid-market companies—via SAP's Fast Track and Oracle's Accelerate—it looks very much like those two intensely competitive organizations are going to fight ferociously for this critical portion of the marketplace now and even after the higher-end enterprise market picks up again sometime in 2010. Here's what each company is offering, and then we'll take a quick look at Microsoft's latest moves for mid-market customers:

SAP's Fast Track

Aimed at retail and distribution companies in the apparel and footwear sectors, Fast Track promises to cut the cost of implementation by at least 20% and time of implementation by at least 30%, SAP said. Consulting services from domain experts are also available. Using this "expert SAP guidance," customers can spend less time tinkering with software and will end up with "the ability to become more profitable, agile and customer-centric in less time," SAP said.

Pricing for most of the Fast Track Implementation services is based on time and materials, SAP said, but the configuration for wholesale distribution includes a "discovery workshop" out of which a fixed-fee price is established. Some customers have begun using the new services, including Bob's Discount Furniture, but SAP offered not details about that experience.

Asked if SAP anticipates bundling these services into existing products, an SAP spokesman said the current plan is for them to remain as separate service offerings, "mostly because these are North America (US and Canada) services, and not globally available (at least not yet), and also because these fit the mid-tier market customer best."

Oracle Accelerate

While no company has ever run its operations on a press release, I have to say that the Oracle announcement materials for its newly expanded Accelerate line far outdid SAP's recent Fast Track announcement. In fact, Oracle went to great pains to emphasize its long-standing commitment to mid-size companies at the very top of its announcement, saying that in the three years that its Accelerate program has been around, "Oracle has added more than 7,000 midsize applications customers and now has over 25,000 midsize customers." Impressive experience, but mid-market CIOs will want to know what new solutions Oracle has cooked up for their own precise challenges: will they be flexible enough?

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
1 of 2
Comment  | 
Print  | 
More Insights
Data Science: How the Pandemic Has Affected 10 Popular Jobs
Cynthia Harvey, Freelance Journalist, InformationWeek,  9/9/2020
The Growing Security Priority for DevOps and Cloud Migration
Joao-Pierre S. Ruth, Senior Writer,  9/3/2020
Dark Side of AI: How to Make Artificial Intelligence Trustworthy
Guest Commentary, Guest Commentary,  9/15/2020
White Papers
Register for InformationWeek Newsletters
Current Issue
IT Automation Transforms Network Management
In this special report we will examine the layers of automation and orchestration in IT operations, and how they can provide high availability and greater scale for modern applications and business demands.
Flash Poll